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tv   Closing Bell With Maria Bartiromo  CNBC  April 30, 2013 4:00pm-5:01pm EDT

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keep speaking about, but i think the consumers are running out of gas in terms of their spending, i think there are a coup of things on the horizon that will create some headwinds. >> and we got an intraday high for the s&p, all-time, and we're closing higher, so that's a new all-time high. stay tuned with maria from los angeles for hour number two of the "closing bell." and it is 4:00 on wall street, 1:00 p.m. in los angeles. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo, coming to you today from l.a. and the global conference sponsored by the milken institute. the dow jones industrial average closing in the green today after being down better than 80 points earlier in the session. we had the buyers swoop in late in the day, take a look at how we're finishing the day on the street again once again. buy on the dip pen tattlmentali. the nasdaq up 21 points at 3328. and once again, another record
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high for the standard & poor's 500 index, even if just barely, up another 3.5 points to another all-time high of 1597, inching towards 1600 now on the standard & poor's. the major averages coming back from early lows today, putting april on the record books for the s&p 500 and the dow jones industrial average. let's get you over to bob pisani, who's recapping the month that was. bob? >> i just want to reiterate again, the s&p did finally, right at the close, hit an historic intraday high, 1597.37. put up the s&p 500, and we can finally make it into that record territory on intraday basis. for the month of april, we were in positive territory. however, i do want to point out that it was a very defensive month overall. put up the major sectors here. the dow industrials, major indices. the dow industrials did end up on the positive side. however, the transportation index, the cyclical index, the russell 2,000 all ended to the downside. this was a very defensive rally that we saw, although there were points where cyclical stocks did a little bit better.
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take a look at the sectors, the major sectors, the s&p 500, the three strongest sectors on the month, all were defensive groups. telecom, utilities, consumer staples. the three weakest sectors were all cyclical names, materials, industrials, and energy. that's all what i'm talking about. let me move on here. we're 60% through earnings season. a lot of people have noted the misses, particularly on the top line. i want to point out, there are several bright spots in the u.s. economy. here are sectors that have had very good earnings commentary. aerospace companies, home-building companies, wood and paper companies like international paper, biotech, and property casualty insurance companies like travelers. one other group, maria, semiconductors like micron. the semiconductor index, new high today. back to you. >> bob, thank you so much. april has been a volatile month, but the major averages still managing to finish higher by more than 1% on the month. will this momentum continue going into the month of may? joining me, michael santoli from yahoo! finance, brian from wells fargo advisers.
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brian, what do you want to go going into the month of may? are you a buyer or a seller? >> we like the market, but we don't feel the need to chase it. you need to be a little bit more prudent. we had a 60% run on the s&p last year. up 11 and change here through april. it's been a nice amount of headway. and i think there are some issues on the horizon. i don't think any of these will upset the global growth apple cart. was should we see some volatility hit the market place, we want to be a buyer. but we'll wait for a pullback. >> you know, i don't know. i really don't like expressions like sell in may and go away. i mean, all this stuff, to me, seems so silly to be coming up with this stuff. but at the same time, when you look at the history book, that's sort of how it's played out, isn't it, mike? >> well, it's played out as broad tendency over many years. so it's not so much a playbook for any given few months or years, but it actually has worked, in fact, i think worked too well the last two or three years, writ seemed like the perfect script to actually lift, get your exposures downgoing
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into may. and now i just wonder, given the fact we have the same year-to-date gain this year as we had a year ago, whether it almost seems almost too pat to think we're going to have another big drop, another 7% to 8% loss in no time at this time last year. to me, bob was talking about the defensive rally, you could flip that over and say, it's been an offensive correction. we've had a lot of corrective activity under the surface, and yet the overall market has not really succumbed. you've gong a long way by having those sectors jrnd perform a little bit. >> that's a good point. when you look at technology, that's certainly been one area that investors have been taking some profits. all right, guys, good to talk with you. thank you so much for stopping in. we appreciate it. and we'll talk with you soon. thank you very much. for the first time in market history, the dow has made it this far into a new year without a three-day losing streak. isn't that amazing? and the s&p 500 keeps breaking record after record. one las to wonder, can this rally continue or is it time to
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take some money off the table? joining me now in a cnbc exclusive, john calamos of calamos investments and howard marks of oak tree capital. two investors who each have four decades of experience on wall street and a combined $100 billion at work in this market. gentleman, good to have you on the program. thank you so much for joining us. howard, let me kick this off with you. because everybody is looking for yields. where are you finding yields in credit? >> yields are down across the board. private debt yields better than public debt. most people, most institutions are allergic to private investing, all things being equal, so you can get better deals on the thing others won't do. so private debt yields better than public, but yields are down across the board, in line with each other. >> i was really surprised, well, how could you be so prized that apple had such a successful offering today, actually. a lot of people talking about that on the credit side, as well
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as on the security side, by the way, on apple. but that's probably just the strength of apple. >> well, that, but also, there's an incredible demand for safety and income. you know, people from 60 to 2000, people were after growth. and so there was the cult of the equities. and it got higher and higher and higher until 2000 rolled around and people owned too many stocks and prices were too high and people liked them too much. they've done nothing for the last 30 years, and now people have fallen out of love with stocks and now they want safety and income. that's the mantra. so the things that deliver safety and income are the things that have received the most attention. >> john, what about from your standpoint? i know you're a growth investor. did i hear you just got back from europe. >> that's right. >> you were in spain? >> i was in athens and greece and cyprus. >> what sense did you get being on the ground in cyprus, in terms of where we are in this debt spiral, going on in europe, and obviously, particular,
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cyprus? >> in particular, cyprus is -- it was not -- they're not a very happy camper, as you can imagine. the financial service industry was one of their biggest industries there and it's obviously in trouble. >> yeah. >> well, i don't think the depositors of the banks are very happy campers either, by the way. >> yeah. it's a big industry for cyprus. >> yeah. >> i was a little bit more optimistic about greece, quite frankly. i've been going there for many years and i had a chance to meet with the government there and it's the most optimistic that i've been for years, to be honest with you. i think they're trying to do the right thing, which is taking the public sector and privatizing it. and i think that's on the right track. i hope they succeed. but they seem to be on the right track, at least for now. >> so you want to buy greece? >> well, we're looking at it. it's an emerging market. >> right, right sure. >> so if you wait for everything
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to be perfect, you know, when is that the time to buy. >> you miss it, right. >> what about you, howard? would you be interested in looking at debt in europe right now? >> we don't invest in sovereign and never have. sovereign requires a political analysis, which may be impossible or may not exist, per se. but we like corporatend we buy corporate debt in europe. we don't go heavily into the periphery, but we are definitely active in europe. >> so, when you say, you know, we're not going into the periphery, so the other areas, so you're not necessarily looking at the italy and spain, but there are, obviously, other opportunities inward. >> well, primarily, germany and the uk are probably relatively safe. >> yeah. john, the last time we spoke, it was about a month ago. you said that the economy, this is the u.s., had recovered enough, excuse me, that the fed could turn off the spigot. now, the markets, of course, have gone through some big drops in the last few weeks. this new debate has occurred
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about whether or not the federal reserve should start winding down, tapering down this stimulus, by the summertime. do you still feel that way? >> you know, i do. i don't think it's working very well. i mean, it sure allows bigger companies to access capital markets at very low rates. but if the idea is to create job growth, how do you create job growth, when job growth comes from small business and bank loans, there is no incentive for loans to be made by banks today. if we had a normal yield curve, which would be an increase in rates, they would have the incentive to loan to small business, which would create jobs growth. so i don't, you know, obviously, the fear is, rates get out of hand on the upside, but if we were just to go back to what i would consider a normal yield curve, i think you would see more job growth than just keeping interest rates so low. >> what i'd like to add is, i agree with john, that number one, business is not investing.
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number two, businesses don't like to invest when there's a great deal of uncertainty. what's the greatest source of uncertainty today? if you ask people, what do you wonder about the moment, the answer would be, when are they going to stop stimulating? what will be the effect? so as long as that is out there in the future, that will be a deterrent to growth. >> yeah. >> get it out of the way. start winding it down, start to show that it won't be fatal to the economy. >> this is such an important point you make. i actually moderated a panel on private equity a little while ago, which i'm going to tell everybody about in my observation today. but, basically, it was stunning to me that even with the record low level of rates, even with the record amount of cash on balance sheets, you're not seeing more m&a. everybody on the panel said the same thing. the reason is is because of confidence. ceos do not have that confidence of predictability that you're talking about. so given all of this, john, how do you want to be allocating capital in this market, being a
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growth investor? >> well, i think there's still opportunities. you mentioned the fixed income area, from a public point of view, not a private investment point of view, the high-quality, high-yield market still looks attractive to us. you can get over a 6% coupon, and what's more important is that duration is five or six years. so those markets have always acted better than the investment grade market if interest rates go up. so that's attractive -- and as far as europe goes, it's not the country, it's the company that you're investing -- you're looking at corporate bonds from a company point of view, and not just a country point of view. >> of course. >> that's what's important. >> yeah, we've done a study recently, and it showed that if you take the high-yield bond index, take interest rates up 200 basis points, over a year, your loss would be about 2%. and so a 2% rise in rates would be a lot. a loss of 2% is far from fatal.
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i agree with john. >> i've got to get for take, john, on growth today. you look at technology and these stocks have really comedown. a stock like apple cut in half, apple, ibm, google. what's wrong with growth right now? >> well, you know, you say the mark's bouncing off a new high, not growth. this is the most undervalued that i've seen technology stock and growth stocks in here. wynn, maria, wynn has growth stocks traded at a lower p.e. than the market p.e. and so what we have in here is a two-tier market. the sternearch for yield has re boasted dividend-paying stocks to very high levels. and nothing against those companies, because they're doing a good job. but growth valuations, because of the unpredictability of what's going on, the market's not very forward looking. so when you have p.e.s in growth
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stocks at this level, i think you have to -- it's a good place to be. now, is it going to happen tomorrow or next week? i don't know. but we can try and think more longer term, we think it's a good place to be. >> so, give me your single best idea right now? before we go, give me one idea, both of you. >> not necessarily a stock or, you know, like an area or, you know, one idea. >> well, we still think technology, that sector, which has really lagged this year, quite a bit, is still a good place to be. so we think that's going to eventually prove to be very, very beneficial. because you get two things. if we do see it come back, you get some earnings growth, but you get p.e. expansion. so even if earnings growth is not catching up, the p.e. expansion could make, you know, total return quite -- >> and you pimight get a divide. >> and you might get a dividend. >> howard, do you have an idea for us before we go? >> i'm not a equity person, but
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our company likes real estate. buildings have been a great beneficiary of the surge for safety and income but lesser buildings in lesser cities and we think that they have not come back from the crisis and have a way to go. >> love it. thanks for sticking your neck out for us and giving us some ideas. john calamos, howard marks, we so appreciate your time tonight. thanks very much. dreamworks animation, meanwhile, the stock making big news after reporting earnings tonight in the extended hours. let's get to josh lipton. >> dreamworks reports investors moving in. that stock is spiking here in the after-hours. we'lt yot up on on the bottom line, the street was looking for a loss, a loss of 3 cents. instead, the company turns in a gain of 7 cents. dreamworks turns in revenue of $135 million. the ceo saying the year off to an outstanding start for dreamworks. he also mentions specifically one movie, maria, "the croods,"
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they reached a blockbuster level of nearly $480 million, well on its way to becoming the number one movie released during the first four months of 2013. dreamworks up about 8% right now in the after-hours. maria, back to you. >> thank you so much, josh. up next, pensions have come under fire, but coming up, we've got the person who ran a portfolio that wiped out $97 billion in losses. the chief investment officer of the country's biggest public pension fund calpers will join me to talk about that feat. he'll be joined by his counterpart at callsters teacheteacher s union. pepgs watchers are concerned if there's not money to pay. also coming up. >> do you still have juice to get the rest of your agenda through this congress? >> if you put it that way, john, maybe i should just pack up and go home? >> the president may have been kidding about congress' relationship with the white
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house, but was house majority leader eric cantor laughing? we'll talk with him in an exclusive to see if there is a way both sides can get together to put our country back to work. also ahead, the commodities futures trading commission moving on last week's bogus terror tweet that sent the markets into a nosedive. we'll have a report from washington. you're watching the "closing bell" on cnbc, first in business worldwide. here we are, me and ♪ ♪ on the road ♪ and we know that it goes on and on ♪ [ female announcer ] you're the boss of your life. in charge of making memories and keeping promises. ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪ oh, oh, all the way ♪ oh, oh the act of soaring across an ocean in a three-hundred-ton rocket doesn't raise as much as an eyebrow for these veterans of the sky. however, seeing this little beauty over international waters
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welcome back. the commodities futures trading commission had long scheduled today's meeting, but not on the agenda, twitter. however, the impact of last week's fake terror tweet changed the plans at the cftc. let's get to eamon javers, he's got the story. eamon? >> that meeting over the cftc is going on right now and they did tack on a discussion at the end of the day here to talk about that fake ap tweet about twitter. and the cftc meeting is going on right now. they haven't actually gotten around to talking about the twitter situation just yet. and i want to tell you the ironic reason, in part, why, and that's because they've been talking a lot about the flash crash events of may of 2010. and that should give you some sense about how long we might be talking about this ap twitter hack. i've been talking to some folks here in washington and i can
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tell you, maria, one of the things that regulators are focusing on right now is this question of whether whoever did this hack attack against the ap's twitter account did it in order to cause some disruption in the markets. if it was just vandalism and hacking, there might not be anything for regulators to do here in this case. if it was intended to cause market disruption, that could be market manipulation. that's something for regulators to go after. but what they're looking at right now is what the intent was there. and obviously, we'll keep you updated on this discussion at the cftc when they get to it later this afternoon, maria. >> all right, eamon, thank you so much. we'll check in on that. up next, they run the biggest retirement funds in their class, over $400 billion in assets combined. we'll talk with the chief investment officers of calpers and calstrs exclusively next. keep it right here on "closing bell."
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gentleman, thank you so much for joining us. joe, calpers made a quite a comeback in returns. assets topping $260 billion. you've recouped the $95 billion loss. how'd you do it? >> took a long time and a lot of hard work and patience. we had a large equity allocation. that exposure to growth risk is what puts you in danger when you have a big drop like the global financial crisis. but if you keep that allocation, then you wait for the markets to come back, and we were rewarded for that. we've also restructured our portfolio and got rid of a lot of managers who didn't perform and adding capital to those who we have high confidence are going to manage well going forward. >> i want to ask about how you're recalibrating things, in particular, asset classes. we'll get into that. let me ask you, chris, about your fund and where you see the growth, where you're positioning it. >> well, it's been rebounding out of the equity markets, both u.s. and non-u.s. which has been such a surprise this year. but even private equity finally has started to come back a little bit and realize.
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those long-term asset classes are just taking their time to rebuild in this slow economy. but both of us have seen huge rebounds in our equity portfolio. >> so in terms of the breakdown, joe, calpers, 49% public equity, 18% income, 13% private equity, 10% real, 5% liquidity, 2% inflation. talk about us public equity, income, and private equity. >> so we're overweight in the global equity. it's about 45% u.s., 45% developed non-u.s. and 10% emerging. we're overweight in that category and looking to keep that overweight. because i'm reasonably optimistic about that. the income category, that's your classic fixed income. but 18's pretty small for a fixed pension fund. and real assets, if i could make it bigger, i would. these are assets that are income-paying, protected against inflation and they're long-lived. good, long-term holds. but it's hard to find values for sale in that. >> what about calstrs in terms
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of your asset breakdown. fixed income, 18%. and when you're looking at global equities, where on the globe are the best opportunities? >> and i would say, we're different than calpers in that area, where they have a true global portfolio of 50/50 u.s. and non-u.s., we still have own country bias. we still like the u.s., two-thirds of our portfolio is in the u.s. one-third outside the u.s. when you look around the globe, i think the most surprising thing, i remember coming here last year to milken and everybody hated europe. and that actually turned out to be a very good place to be. even greece, which is amazing. but, obviously, the run-up in japan has been amazing. because of the amount of stimulus the bank of japan has dumped into that market. i think as steve liesman always says, you don't fight the fed. and around the world, you're seeing outflows of capital coming in from the federal government, each of the federal reserves and central banks. so you have to buy risk assets.
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>> i think it's morgan stanley who said, japan is its favorite equity market right now. >> i believe so. >> if you're hedged against the yen. >> you've got to hedge against the yen. so that difference -- >> chris has got the home country bias to the u.s. he used that to beat us last year. i'm hoping the global weight this time will work. you know, we're competitors, right across the river in sacramento. but we have so much in common in terms of the challenges that managing these large pools of assets and how to allocate capital and how to make sure it's investment criteria that drives the decision making. it's a lot of fun. it's fun to be here with you and talk about what we're doing. >> we've got to sage, we're college rivals. we're in the same town, we're natural rivals. if you kick on california, you'll get both of us fight back. and the funny part is, we only cover teachers. my retirement fund -- >> okay, this is very good. i like that. you're both -- >> i want to beat him. >> but not too much. >> in terms of the globe, in terms of global equities, where are the best markets from your
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standpoint? >> the long-term play are the emerging markets, but long-term, and just because there's growth in an emerging market economy, doesn't automatically translate into equity growth, you've got to be selective and smart and go where the capital is going to be well-treated for contract law and political stability is there. but long-term, that emerge of the middle class around the world is the place to put capital. that means real estate, it means infrastructure, as well as equity positioning. i also think the u.s. is a great place to be. i mean, i'm real strong on what the u.s. and the competitiveness of our companies and their global reach make them still attractive values. >> i was going to say, i think, in years past here at milken, you've been here, everybody talked about the brics. that's ban been a bit absent th time. and i think everybody realizes, when you look around the globe, the u.s. is the best place to invest. >> what about real estate? because you've got real estate here at 13.6% of the portfolio. where? what kind of real estate? >> well, certainly has seen a
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rebound in manhattan and in boston, d.c., parts of l.a., parts of san francisco. but it's not been universal. it's very choppy. so, for us, it was a matter of just like repositioning that portfolio, taking away some of the opportunistic and being more in core real estate. an office building that's fully leased has had income streaming we want to see. and i was impressed by today's housing numbers. i don't think it is even near a bubble, but it's nice to see residential housing finally have a rebound. that's going to lead, i think, eventual, into commercial. >> core real estate is really attractive, because it's income paying and we've got to pay benefits. we're shifting our portfolio from the opportunistic to the core. core is hard to buy, because chris is trying to buy it, i'm trying to buy it, and so is everybody else. it will take us five years to get us there, but we had our heads handed to us on opportunistic real estate before the crash. so we're trying to apply that lesson and be steady long-term. >> leverage always works both ways. >> returns and keeping your
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pension fully funded is a big challenge for both of you. let's talk about that for a moment. are you confident you're hitting your targets and you're going to be delivering for your members. we're all worried -- >> that's right, because if we don't succeed, then taxpayers are behind it. we have a 7.5% target. that's what chris has. a lot of people say that's unrealistic. i think if you look at our ten-year record, which now incorporates the global financial crisis, we're about 8%. so i think we can. but, you run this risk of a large loss. and if you're 73% funded like we are, you fall too deep into the hole, you can't grow your way out. so the challenge for calpers this year, what our board is working on, is how to consider that drawdown risk. do we reduce the target rate of return? do we engineer the portfolio to do things like fundamental indexes and low beta hedge fund strategies? how do we handle that? that's the big challenge for us. >> one of the things i thought was interesting with your fund, chris, is that your moving to divest, out of the companies
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that make weapons that are legal in california. >> yeah, we had a lot of commenting coming from teachers. our board was very concerned about the incident at sandy hook and just the growing apprehension of those types of products. and i think esg in general, environmental social, and governance is coming into play in a number of things. both of us are part of the united nations principles for responsible investing, so we factor that in as a risk to our portfolio. >> good to talk to you. chris ailman joining us. the to do list congress has is growing longer every day. house majority leader eric cantor will be with me in a few moments about the high-priority items incoming the budget, tax reform, and the president's claim today that the sequester is hurting the economy much worse than a lot of people think. your money is at stake here. don't miss that interview. and also ahead, new bubble in the housing market, fact or fiction? diana olick is breaking down whether the housing market is
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welcome back. as evidence mounts that the housing recovery is on solid ground, some market watchers worry that another bubble is in the making. diana olick has been crunching
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the numbers to find out whether these claims of a new bubble are reality or myth. she joins us now. over to you, diana. >> reporter: well, that's right, maria. home prices saw their biggest annual gains in february since the middle of 2006 on the s&p case-shiller home price index, up over 9% for the top 20 market composite. but when you go local, the numbers are truly eye-popping. >> it is very strong, it's a solid rebound. i would not call it a bubble. i'll admit, a bubble is one thing you don't see when you're in it, you only see it after it bursts. >> reporter: all right, so let's look back at the index to the bubble years. the biggest annual jumps were in '04 and '05 when values rose as high as 16%. prices were fueled by cheap and easy credit, which, of course, does not exist today. and by specklatulators who boug and flipped homes with no skin in the game. we are still 30% off those highs
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nationally, despite the recent gains. let's go local, where some price jumps are immediamediocre. from the peak of the housing boom to the trough, home prices in phoenix fell 26%. and despite the big gains now, they're still down over 40% from that peak. the gains only look so big, because they're coming off a much bigger number. now put the phoenix story next to dallas, that's in orange, where home prices fell 9% peak to trough, and are now just 2% below their peak in april of '07. does that make dallas a bubble market and not phoenix? not if the gains are backed by a good local economy. now, the big concern here is that these home price gains are driven by abnormally low supply and not by strong economic growth. and you can see that in the local numbers on our recovery watch map. go to it at maria? >> diana, thanks so much. one of the world's most
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the forefront of the digital revolution. they've reached a record circulation of 602,000 with digital subscriptions surpassing print. joining now to talk about the "financial times'" business model is john riding, who rang the bell today to celebrate their 125th anniversary. good to see you, john, thanks so much for joining us. >> thanks, maria. >> congratulations on 125 years, stellar publication. you know, it's an interesting time to be talking about the next 100 years, given the digital revolution. what was your take on what barry diller said on it was a mistake to buy "newsweek"? >> i can't comment on that, but i think print is working very well for us as is the overall business model and digital growth. our print operations, even before advertising are now profitable. we've built a mull-channel business, we're seeing strong growth in digital and mobile. and i think we've come through a period of turbulence in the industry and in pretty strong
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shape. >> so how do you do that? how do you balance having the print publication, but also investing enough in the digital product, so that you can charge for that contact? how do you make the business model work? particularly in an advertising market. particularly in an advertising market, pardon me, that is weak to just muddling along. >> sure. i think it's a combination of being very flexible in the business model and really adapting to how readers want to take the journalism, whether it's on mobile, in print, on pcs. but then having some pretty core fundamentals. and in our case, that's kind of a long-standing and long-term and permanent commitment to quality global journalism. so it's flexibility, but also some core principles. >> is mobility the key here for newspapers? >> yeah, i think, you know, mobile, the term game changer is often overused, but i think mobile is a game changer, certainly, potentially for us and for the industry.
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it enables you to reach readers anytime, anywhere. and without paid-for subscription model, that's profitable from day one. mobile now is about a third of our traffic and about 20% of our subscriptions and the rate of growth over recent years has been pretty dynamic. >> how would you characterize the advertising market right now, john? >> very short-term, very volatile, and very unreliable. so, you know, for that reason, that's why we've deliberately readjusted our business model to journalism and to content. so there's still a lot of advertising out there, but the visibility and the predictability and the ability to invest in your business on the basis of that revenue stream is a bit tricky. >> yeah. that makes a lot of sense. so where are you seeing the most bang for the buck. who are the spenders in terms of sectors out there, right now. i mean, for a long time, we were all very reliant on the autos. and then suddenly the financial services companies were very much out there, you know,
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spending big bucks on advertising. who were the cast of characters doing much of the spending right now? >> for us, we've got a pretty high-end audience and luxury has been pretty resilient, even through the downturn. we have tried to build a pretty diversified advertising base. you don't want to be too dependent on any one sector. so if one region is kind of struggling, then we tend to have other regions that are offsetting that. >> so are there any plans to focus, you know, go all in on digital and do away with the newspaper? >> i mean, our model is basically driven by our readers and what we're seeing from our readers is there's still some pretty strong demand in financial centers for the print publication. it's a format that works very well for them and, you know, as i said earlier, it's profitable, before advertising, so for us, it's a great revenue line and profit stream. >> yeah. people love the newspaper. that's the bottom line. how will you change it going forward? any changes on the horizon that you're working on right now as
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you mark this important era of 125 years? >> yeah, we've got a steady pipeline of innovations and services, in particular, in digital, we're looking at ways of bringing our readers together and connecting our audience to each other and to ourselves. that's one element. we've just launched a new web app for mobile users, which has more personalization. so there's a constant stream of innovations and new services really being fed by the reader demand, that we kind of understand much better no through our subscription base. you know, we have a much more direct and closer relationship to our readers than we've had in the past, where we were really focused on retail sales and now we have a much deeper engagement with our audience. >> yeah, that list of subscribers certainly key. john, good to have you on the program. congratulations and thanks so much for joining us. >> thanks very much. >> thanks a lot. >> john ridding joining us, the
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"financial times." stocks make history once again on wall street today. we'll talk markets when we come right back. stay with us. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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welcome back, from the milken conference, the global conference, the s&p 500 hitting another record high today.
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let's get to bob pisani, he's been in the middle of the action all day. bob, amazing that even when we saw that big sell-off earlier in the day, the buyers came out of the woodwork by the close, once again. >> isn't it remarkable? we have slow global growth, china is very fragile, europe is still in a recession, the u.s. is at 2% gdp growth and we're at historic highs. that's a disconnect that even the professional trading community is having trouble dealing with right now. and there is a buying trend in the market. we started weak, we've done this for weeks on end, started weak and end the day in positive territory, even if it's only a few points eking out to the positive side. one thing i want to say about earnings, maria, a lot of publicity around missed on the top line and weak bottom line, there's a number of sectors that have really done very well so far this quarter. so, for example, home building stocks have done very well. we've seen biotech and aerospace stocks do particularly well. even old, boring, old school companies like international paper and boise cascade have done well. and property casualty insurance
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companies, travelers had an excellent report overall. even semiconductor companies, like micron have had fairly decent earnings reports. the stocks, the semi-conductor index ended at a 52-week high today. so there are little bright spots of the u.s. economy that are very really doing very well right now. >> bob, i hate that sell in may, go away. you know, what do you think about the month of may? it's just like, it reminds me of buy low, sell high. give me a break. is this really something people follow? >> yes. unfortunately, it is. it has a very strong following on the street. that's because, historically, the numbers pretty good. there does tend to be an outperformance from november into april and a bit of an underperformance from may to october. with that said, may, june, july, the last few years have not necessarily been that bad. there have been a few patches sometimes in august and september. those have been the times where we've seen some difficulties, but, maria, this world is so different than any other world we had before with the fed injecting massive liquidity, the
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ecb involved, the japanese central bank involved. it's very difficult to use these old chestnuts as a trading methodologies anymore. i would be very cautious about that. >> exactly. exactly. now, i want to get your take on technology, because, today, tec was among the leadership, bob. but we all know tech has been underperforming big time as these averages hit new highs, you've got apple down, half of its value, google, ibm, all these big large cap technology names being sold. >> yeah. the problem has been everyone has been looking rather hard at the services side of things. the services for ibm which was their 60% of their business was on the weak side. that's because companies are putting off making important investments in i.t. because of the uncertainty. it's the same thing some of the big industrials are having. guys who make heating, ventilation, and air-conditioning are finding people who should've replaced their systems after ten years are waiting 12 and 13 years.
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same with i.t., people are waiting longer to replace their systems and some of the software systems they have work fairly well. they don't necessarily need constant upgrades. that's a bit of an issue. but with that said, even there, i pointed out, semiconductors had fairly good numbers this quarter. i thought that was a bright spot. >> absolutely, bob. thanks so much. talk to you later, bob pisani. the s&p 500 with another gain. let's go to josh lipton with extended hour action right now. >> hey there, maria, headlines here on open table, that's the restaurant reservation system. and here's the new steven cohen's s.a.c. capital has disclosed a 5% stake in the company. right now, unchanged in the afterhours, but open table up about 14% this year. maria, back to you. >> all right, josh, thank you so much. we're going to come back in one moment with a lot more ahead on "closing bell." stay with us.
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helping hospitals treat people even better, while dramatically reducing waiting time. now a waiting room is just a room. [ telephone ringing ] [ static warbles ] [ beeping ] red or blue? ♪ welcome back. my next guest has been a republican u.s. representative from virginia since 2001. he has served the house as the house majority leader since
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2011, we welcome back to the "closing bell," eric cantor in a first on cnbc interview. good to see you. >> maria, pleasure. >> i want to start off with the president's comments about the sequester, you know, earlier the president said that the sequester at a press conference is doing real harm to the economy. let's listen in, i want to get your reaction to that. here's president obama. >> the notion was somehow that we exaggerated the effects of the sequester, remember? the president's crying wolf, he's chicken little, the sequester, no problem. what we now know is that what i warned earlier, what jay stood up here and warned repeatedly is happening. it's slowed our growth, resulting in people being thrown out of work. and it's hurting folks across the country. >> so leader cantor, what about that? we know what went on with the faa and furloughs, and everyone was saying, why couldn't we have
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been more organized in terms of saying this airport is busier than this airport? so let's take, you know, fewer people, a furlough here and more here. what is the truth? >> well, you know, again, it was always our belief that the faa and the administration had the legal authority to enforce the reductions in spending in a smart way. they came back and finally relented saying we're not going to keep this pressure on as i think the original intention was. and went ahead and asked for the bill that just passed last week. but listen, overall, the sequester in terms of across the board cuts, i don't think anybody chooses that way to go and reduce spending. but over and again, the house has tried to get the president to come along and join us with cuts that make sense. we all know we've got a spending problem, we've got to come together and try and address that so we can get this country back on to a growth track. >> how much of the sequester has taken effect? and how much is this going to be an issue later on in the year?
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is the sequester going to cause slowdowns second half of the year? >> if you look at it overall government wide, entitlement spending as well as discretionary spending, i think the estimates are the sequester may amount to about a 4% cut. certainly if you were to go and take that in context in the private sector, you manage it, you go in and try to achieve efficiencies. certainly there are areas in the federal government that we can reduce the spending on. >> you know, people are so upset that congress seems to be unable to come to an agreement. >> maybe in july, maybe later, we don't really know. in the house, we're hard at work trying to figure out what the best way forward is. obviously, we're a country that pays its bills, but we also maintain a commitment to say we've got to do something about the unfunded liabilities that keep mounting associated with the entitlement programs. we can all do this.
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we can get together and solve this problem. hopefully we'll see some success this summer. >> what about tax reform? how would you like to see the tax reform play out? >> well, i think all of us would like to see comprehensive tax reform take place where we can actually make our codes simpler, fairer, reduce rates to spur innovation and growth. this conference we're at, the global forum is all about innovation and growth. i think making priority innovation is where we ought to head in terms of tax reform and policy in d.c. >> i guess you're going to be talking to harry reid at the conference. that's going to be interesting. >> we had an interesting discussion yesterday. and i think it served a purpose, we can appreciate the sensitivities on both sides. he and i disagree on a lot. i think we've got to practice setting aside those disagreements and coming together in areas we do have in common to producing results. >> here we are at this forum where it's all about growth and
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innovation. how does the u.s. economy get back to a sustained growth rate? >> well, i think we need some, you know, some real commitment to free markets, real commitment to balance sensible regulations. not just more regulation. a commitment to having a competitive tax structure. right now we hear over and again that's an issue for american based multinationals and people looking to invest their capital here. i also think we need to focus on promoting an eco system for investment. we want investors to come here, allocate their capital to the united states to go and create wealth and build value. >> so that means supporting small business, supporting business so they do invest in innovation? >> we want to be the destination for entrepreneurial investment. we've got to talk to small business people. we know that the job generators, innovation breeds jobs. >> eric cantor, great to have you on the program. i know we wanted to have more time. we hope you'll come back and join us for an extended interview. that'll do it for "closing
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bell." thanks so much for being with us. i'll see you tomorrow in new york. "fast money" begins right now. in new york city's time square, i'm melissa lee, here's what "fast" following. the one chart watcher sees a market divider. he'll explain why that could be a huge warning sign for stocks. cable unplugged. the media companies have been huge winners, can the momentum continue as more people cut the cord? a top money manager separates the winners from the losers. how hollywood heavy hitters are pushing one money center to record profits. the ceo shares his company's celebrity studded secrets for success. we're tackling all the post game analysis and setting up for dan nathan, guy adami and mike khou. apple wowing the street with the record debt deal aimed at raising capital to fund the


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